Latest news with #VIXIndex
Bloomberg
6 days ago
- Business
- Bloomberg
Hedge Fund Picton Buys Volatility, Fearing a New Tariff Tantrum
The head of Canada's Picton Mahoney Asset Management said the global market volatility that has faded in recent weeks is likely to return, and his firm is betting on it. Equity markets have rallied sharply since US President Donald Trump paused many of the tariffs he had announced in his 'Liberation Day' speech. The S&P 500 has surged 19% since the April 8 close and just notched up its best May since 1990. The VIX Index, a volatility gauge, has tumbled. It closed Friday at 18.57, compared with its lifetime average around 19.5.
Yahoo
21-05-2025
- Business
- Yahoo
Hinge Health, MNTN IPOs Test Strength of US Listing Rebound
(Bloomberg) — The digital-health and advertising-technology sectors share a rich history of IPO disappointment, making this week's planned debuts of physical therapy platform Hinge Health Inc. and TV ad software firm MNTN Inc. a test of whether the nascent recovery in the US first-time share sale market can keep going. Can Frank Gehry's 'Grand LA' Make Downtown Feel Like a Neighborhood? Chicago's O'Hare Airport Seeks Up to $4.3 Billion of Muni Debt NJ Transit Makes Deal With Engineers, Ending Three-Day Strike Former initial public offering darlings such as SmileDirectClub, which shut down in 2023 after shares collapsed, and Teladoc Health Inc., whose stock is trading nearly two thirds below its listing price, offer cautionary tales. These wipeouts show the difficulty of technology startups aiming to make health-care cheaper and more efficient winning over investors. In the adtech sector, only a few companies — most notably Trade Desk Inc. — have found lasting success in a digital advertising landscape dominated by Alphabet Inc.'s Google. Yet enticing valuations and insulation from trade conflict are helping Hinge Health and MNTN attract solid investor interest in their offerings, proving that, priced right, investors are willing to get behind listings from less-loved sectors. 'We're seeing renewed IPO interest in sectors like digital health and adtech because they sit at the intersection of strong secular tailwinds and maturing business models,' said Mike Bellin, PwC's US IPO leader. 'These companies are benefiting from increased demand for personalized, data-driven solutions and are now demonstrating the scale and profitability that public market investors are looking for,' Bellin said. 'This activity reflects a broader shift in the IPO market — investors remain selective, but they're ready to engage when the growth story is compelling and backed by fundamentals.' Ahead of pricing later on Wednesday, both the Hinge Health and MNTN IPOs were multiple times oversubscribed, people familiar with the offerings have said. Hinge Health is guiding investors to price at the top end or above a marketed range, Bloomberg News reported earlier Wednesday. Both deals are proving well-timed, with the recent broader market recovery and pullback in volatility measured by the VIX Index – Wall Street's so-called fear gauge — falling below 20 in the past week before lurching back up on Wednesday. Other recent debuts have delivered meaningful post-IPO gains — a necessary precursor to greater activity levels. Most notably, shares of CoreWeave Inc. have more than doubled since the AI data center operator went public in late March, salvaging what had seemed like a misfire of epic proportions when the size of the offering was cut and the stock initially traded underwater. Since then, only five companies raising more than $100 million, excluding blank-check companies, have gone public in the US as the tariff drama whipsawed markets. Yet all five are trading above their respective IPO prices, and the few names that have debuted in recent weeks have offered either little or no exposure to goods facing tariffs, or a preparedness not to press investors for top dollar. 'In light of the tariff, economic, inflation uncertainty, investors are focused on sectors and stories which are relatively protected from trade policy, demonstrate visible growth and reasonably valued,' said Stephane Gruffat, global head of equity capital markets syndicate at Deutsche Bank AG. Hinge Health, which uses software and AI to automate musculoskeletal care for people experiencing chronic pain or recovering from surgery, would command a market capitalization of nearly $3 billion at the top of its IPO price range. This equates to about 7.6 times last year's revenue of $390.4 million, according to Bloomberg calculations. Though Hinge Health lacks an ideal peer, the IPO values the company at a significantly lower revenue multiple than digital health companies such as Veeva Systems Inc. and Doximity Inc., as well as software firms concentrating on specific industries such as trades-focused ServiceTitan Inc. whose shares are up more than 70% since it went public in December. Hinge Health is also set to list at a significantly lower valuation than the $6.2 billion figure implied by a 2021 funding round when the pandemic underscored the value of virtual health-care options. Despite bringing the star power of creative director and movie star Ryan Reynolds, MNTN's IPO values the 16-year-old company at a modest market cap of as much as $1.4 billion. That's about six times trailing revenue of $226 million last year, well below the double-digit sales multiple of Trade Desk, which went public in 2016. Smaller adtech companies such as PubMatic Inc., Viant Technology Inc. and Magnite Inc. trade at comparatively modest trailing revenues multiples. 'Trade Desk does get a premium given its scale and track record so MNTN should trade at a discount,' said Rohit Kulkarni, Roth Capital Partners' senior research analyst. Still, MNTN's 28% top-line growth in the first quarter of 2025 versus a year earlier, and the rapid growth of the streaming services it helps steer small and medium-sized businesses' ad dollars towards, may convince investors to to treat it more like Trade Desk than other adtech firms. 'There was a time when adtech was immediately looked at with suspicion because of a long string of failures but Trade Desk helped mitigate that,' said Matt Kennedy, senior strategist at Renaissance Capital, a provider of pre-IPO research and IPO-focused ETFs. 'It's not like digital health and adtech are working right now, and the most highly valued companies are still staying private as long as possible.' Why Apple Still Hasn't Cracked AI Inside the First Stargate AI Data Center Anthropic Is Trying to Win the AI Race Without Losing Its Soul Microsoft's CEO on How AI Will Remake Every Company, Including His Cartoon Network's Last Gasp ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
16-05-2025
- Business
- CNBC
Bulls crushed the volatility and rallied the market back. Carter Worth on what happens next
(Check out Carter's for actionable recommendations and live nightly videos.) The "vol crush" is complete, with the Cboe Volatility Index (VIX) now back down to a level that prevailed just before the stock market's sell-off got underway on February 19 (Tuesday, February 19 th was the day the S & P 500 Index registered its all-time high). A volatility crush is a sudden and sharp decrease in implied volatility – which is the market's expectation of future volatility, leading to a corresponding drop in the prices of options contracts. This typically happens after an event that initially caused a spike in volatility, such as the announcement of prospective aggressive tariffs. As seen in the chart below, the "vol crush" leaves the VIX Index back down "to the penny" to the uptrend line in effect the past 6 months. Our thinking here and now is to anticipate a bounce in the VIX in the day/days ahead — and a corresponding dip in the S & P 500 Index . DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
Globe and Mail
30-04-2025
- Business
- Globe and Mail
Long Straddle Screener Results For April 30th
Volatility has eased in recent weeks as the market digests the latest tariff headlines, but it could ramp up again at any time. The VIX Index closed at 24.17 yesterday after hitting a high of 60 earlier in April. If volatility rises again Long Straddles could work well, so today we're taking a look at the Long Straddle Screener. A long straddle is an advanced options strategy used when a trader is seeking to profit from a big move in either direction and / or an increase in implied volatility. To execute the strategy, a trader would buy a call and a put with the following conditions: Both options must use the same underlying stock Both options must have the same expiration Both options must have the same strike price Since it involves having to buy both a call and a put, the trader must pay two premiums up-front, which also happens to be the maximum possible loss. The potential profit is theoretically unlimited, although the trade will lose money each day through time decay if a big move does not occur. The position means you will start with a net debit and only profit when the underlying stock rises above the upper break-even point or falls below the lower break-even point. Profits can be made with a smaller price move if the move happens early in the trade. Let's take a look at Barchart's Long Straddle Screener for April 30th. I have added a filter for Market Cap above 40b and total call volume above 2,000. The screener shows some interesting long straddle trades on popular stocks such as KO, MU, AMZN, PYPL, BAC, PLTR and JPM. Let's walk through a couple of examples. WMB Long Straddle Example Let's take a look at the first line item – a long straddle on WMB. Using the June 20th expiry, the trade would involve buying the $60-strike call and the $60-strike put. The premium paid for the trade would be $555, which is also the maximum loss. The maximum profit is theoretically unlimited. The lower breakeven price is $54.45 and the upper breakeven price is $65.55. The premium paid is equal to 9.3% of the stock price and the probability of profit is estimated at 43.7%. The Barchart Technical Opinion rating is a 88% Buy with a Average short term outlook on maintaining the current direction. Long term indicators fully support a continuation of the trend. The market is in highly overbought territory. Beware of a trend reversal. Implied volatility is currently 31.81% compared to a twelve-month low of 17.90% and a high of 55.13%. KO Long Straddle Example Let's take a look at the second line item – a long straddle on KO. Also using the June 20th expiry, the trade would involve buying the $72.50-strike call and the $72.50-strike put. The premium paid for the trade would be $4.09, which is also the maximum loss. The maximum profit is theoretically unlimited. The lower breakeven price is $68.41 and the upper breakeven price is $76.59. The premium paid is equal to 5.7% of the stock price and the probability of profit is estimated at 43.5%. The Barchart Technical Opinion rating is a 88% Buy with a Strengthening short term outlook on maintaining the current direction. Implied volatility is currently 18.47% compared to a twelve-month low of 10.82% and a high of 30.61%. PYPL Long Straddle Example Let's take a look at one final straddle, a long straddle on PYPL. Using the June 20th expiry, the trade would involve buying the $67.50-strike call and the $67.50-strike put. The premium paid for the trade would be $666 , which is also the maximum loss. The maximum profit is theoretically unlimited. The lower breakeven price is $60.84 and the upper breakeven price is $74.16. The premium paid is equal to 10.0% of the stock price and the probability of profit is estimated at 43.2%. The Barchart Technical Opinion rating is a 72% Sell with a Weakening short term outlook on maintaining the current direction. Implied volatility is currently 33.91% compared to a twelve-month low of 25.84% and a high of 72.14%. Mitigating Risk Long straddles can lose money fairly quickly if the stock stay flat, and / or if implied volatility drops. Position sizing is important so that a large loss does not cause more than a 1-2% loss in total portfolio value. Another good rule of thumb is a 20-30% stop loss. Please remember that options are risky, and investors can lose 100% of their investment. This article is for education purposes only and not a trade recommendation. Remember to always do your own due diligence and consult your financial advisor before making any investment decisions.
Yahoo
17-04-2025
- Business
- Yahoo
Beneath Market's Uneasy Calm, Dread Runs Deep Across Wall Street
(Bloomberg) -- It was an unexpected, if improbable relief. The panic unleashed by Donald Trump's trade war, which convulsed financial markets around the globe and sowed doubts about America's standing in the world, died down nearly as quickly as it began. Trump Signs Executive Orders on Federal Purchasing, Office Space DOGE Places Entire Staff of Federal Homelessness Agency on Leave How Did This Suburb Figure Out Mass Transit? Why the Best Bike Lanes Always Get Blamed Nashville's $3 Billion Transit Plan Brings a Call for Zoning Reform The S&P 500 Index — after swinging more than 10% in a single day as volatility hit levels not seen since the pandemic's onset or the 2008 credit crisis — this week settled into something of an uneasy calm. The VIX Index, or fear gauge, pulled back sharply from pandemic highs. And US government bonds once again reclaimed their longstanding role as the world's 'risk-free' asset. Yet all across Wall Street, from bond-trading desks and corporate C-suites, to hedge funds and independent research firms, there's a deep-seated sense of foreboding that it can't possibly last — and that with a single social-media post by the US president it could all rapidly go awry. 'This is just one guy controlling trillions and trillions and trillions of dollars,' said Scott Ladner, chief investment officer at Horizon Investments. 'We have never really seen anything to this extent — ever.' By backpedaling on his most punitive tariffs, signaling his willingness to negotiate with America's trading partners, and then holding back from further escalating, Trump pulled markets back from the brink and restored a semblance of normalcy. The about-face came after waves of frantic selling sent Treasury yields surging last week, which threatened to upend the economy and fanned fears that his policy priorities would irreparably fracture both America's alliances and its standing as the preeminent destination for global capital. But his chaotic, on-again, off-again effort to single-handedly rewrite the rules of global trade that have prevailed for decades — and his initial indifference to the market meltdown it set off — has undermined confidence in the direction of the US economy, and by extension, where asset prices of all kinds are headed. On Friday, Trump even cast doubt on the Federal Reserve's independence by suggesting he could oust Chair Jerome Powell if he doesn't lower interest rates. 'The market has a lot of excess fear,' said Jay Genzer, founder and CIO at Thames Capital Management LLC. 'We've seen the massive event but there's a lot to be nervous about.' Trump's push to increase levies on imports to the highest in over a century is almost certain to deal the nation another inflation shock and slow a resilient US economy that in recent years has powered much of the world's growth. His decision to pause some of his highest levies for negotiations — even as he kept steep ones on China — has only added to the uncertainty. Recent earnings reports, which usually provide stock-market reality check, underscored how much the outlook has shifted in a matter of weeks. Those from banks like Bank of America Corp. and JPMorgan Chase & Co. showed business held up well during the recent quarter, thanks in large part to still-healthy consumer spending. With consumers worried about the impact of Trump's tariffs and businesses in wait-and-see mode, though, there's little clarity about where profits are headed. United Airlines Holdings Inc. took the unusual step of issuing two forecasts, seeking to reassure jittery investors that it would still earn solid profits even if there's a US recession. Bob Doll, the chief executive of Crossmark Global Investments, is contending with similar doubts. Usually, he said, he can entertain a relatively narrow range on his calls for where the stock market is heading. On Wednesday, though, as the S&P 500 held around 5,350 — he said it could tumble down to near 4,000, or jump back to 5,800, depending on whether the US dodges a recession or not. 'You can drive a truck through that range,' he said. Wall Street strategists have been ratcheting down expectations for US equities. Citigroup Inc. joined others that are growing more cautious on the outlook. But, on the whole, such forecasters remain relatively optimistic, with the average estimate implying bounceback by the end of the year. Raheel Siddiqui, a senior strategist at Neuberger Berman, said as deep as the stock market's slide has been, it's still not pricing in the risk that Trump is willing to endure a temporary recession to implement an agenda he hopes will revive the nation's manufacturing industry. 'When we look at the US stock market, we don't see recession priced in,' he said. 'When a president says 'recession so what, short-term pain, long-term gain,' you don't know to what extent he is willing to go. If he keeps going, at some point he will break the camel's back.' In the bond market, the selloff that raged last week has largely abated, sowing some optimism that it was driven heavily by the unwinding of leveraged positions and a hurried need to raise cash instead of a loss of confidence in the US government. None of those concerns has gone away, however, with officials and investors continuing to express concern that the recent volatility is casting doubt on the US Treasury market's status as a haven. Yet Trump's decision to pause his tariffs just as the selloff was worsening provided some reassurance that he's not willing to let the bond market sink too far. 'When you see the 10-year increase by half a percent over a very short period, it's going against what the administration is hoping to accomplish,' said Scott Pike, senior portfolio manager at Income Research + Management. 'It was not hard for the administration to take note of that and change course.' Still, he said, the volatile selloff has left bond investors nursing worries about whether they're being paid enough for the risks now hovering over the Treasury market. 'It's going to take a while for concerns around that to move lower,' he said. --With assistance from Ye Xie, Matt Turner and Jeran Wittenstein. 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